Inflation places new and heavy demands on financial management. The CFO must take greater responsibility and plays a key role in managing inflation. Inflation means that money becomes a “perishable fruit” and should be treated like one. It must be collected as quickly as possible and reinvested in assets that retain their value. A company’s goal should be to maintain profits in real terms. One should not be fooled by an increase in nominal profit, the so-called “money illusion.”. Every company’s weighted average cost of capital (WACC) will be driven up by rising interest rates and higher risk premiums during inflation making it more difficult to achieve an economic profit. Nevertheless, this target should not be abandoned. Inflation consumes cash and financial leaders must sharpen their cash focus during inflation. For pricing purposes, it is essential to refer to replacement costs, possibly supplemented by an add-on for the phantom profit effect.


    Zugriff

    Zugriff prüfen

    Verfügbarkeit in meiner Bibliothek prüfen

    Bestellung bei Subito €


    Exportieren, teilen und zitieren



    Titel :

    Prioritize Finance


    Beteiligte:
    Simon, Hermann (Autor:in) / Echter, Adam (Autor:in)

    Erschienen in:

    Beating Inflation ; Kapitel : 13 ; 109-117


    Erscheinungsdatum :

    2022-11-11


    Format / Umfang :

    9 pages




    Medientyp :

    Aufsatz/Kapitel (Buch)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch







    A Streamlined Approach to Prioritize Sidewalk Investments

    Perez, C. / Zipf, M. / Institute of Transportation Engineers | British Library Conference Proceedings | 2010


    Decision Tool to Prioritize Multinational Transportation Infrastructure Investments

    National Research Council (U.S.) | British Library Conference Proceedings | 2005